The company most affected by the latest moves is Etisalat. The UAE telecoms firm has long enjoyed the lax disclosure regime in its home market. The Abu Dhabi Securities Market, where Etisalat is the largest company, does not require listed companies to reveal their performance for every market in which they operate.
This did not matter when Etisalat generated all its revenues in the UAE. However, since 2005 it has expanded into Saudi Arabia and Egypt. The firm spent heavily on international expansion, but shareholders were unable to see whether those investments were paying off.
Now, the Egyptian and Saudi regulators have decided to do what the UAE would not. Cairo’s National Telecommunication Regulatory Authority will publish details of the performance of telecoms firms from May. Saudi Arabia’s Communications & IT Commission will make telecoms firms there do the same from the second quarter of this year.
Shareholders are suddenly going to get a much better insight into their investments in two of the region’s most important markets. They will be able to compare Etisalat with Saudi Telecom for the first time, and weigh up Vodafone Egypt against Mobinil on the same basis.
Greater transparency should also benefit the companies. Investors will be more reliable supporters of corporate strategies if they can see why companies make the decisions they do.
Companies in other sectors that sell to consumers should now be forced to open their books too. The most obvious place to start is the retail sector, where the complete absence of financial results stops governments from assessing inflation and consumer sentiment.